The Federal Bureau of Investigation is launching a unit dedicated to tracking and seizing illicit cryptocurrencies as part of a broader shift in focus toward disruption of international criminal networks rather than just their prosecution.
Deputy Attorney General Lisa Monaco said Thursday that the new team, called the Virtual Asset Exploitation Unit, will centralize the law enforcement agency’s cryptocurrency expertise and provide blockchain analysis, virtual asset seizure and training to the rest of the FBI.
“This FBI unit will combine cryptocurrency experts into one nerve center,” said Ms. Monaco, speaking at the Munich Cyber Security Conference.
Cryptocurrency has emerged in recent years as the primary means by which cybercriminals reap the financial rewards from cyberattacks. A February report issued by blockchain analysis company Chainalysis Inc. estimates that around $11 billion in cryptocurrency holdings at the end of 2021 had illicit sources. Law enforcement agencies have zeroed in on disrupting the economics of cybercrime as a key prevention tool, by recovering funds paid in ransoms or stolen by hackers and identifying hackers through transactions.
The FBI’s Virtual Asset Exploitation Unit will work with the Justice Department’s National Cryptocurrency Enforcement Team, a group of about a dozen prosecutors that Ms. Monaco established in late 2021.
The DOJ announced earlier Thursday that Eun Young Choi, a career federal prosecutor, will serve as the NCET’s first director.
The Justice Department also announced an international virtual currency initiative, through which it will help law enforcement authorities in other countries improve their techniques and abilities in cryptocurrency investigations, Ms. Monaco said.
International law enforcement agencies have helped in previous cybercrime investigations, she added. “We can’t do this alone,” she said.
The DOJ is taking additional measures to step up its cybercrime work with international law enforcement authorities. U.S. prosecutors handling significant cybercrime investigations will now be required to consult with department experts to identify foreign partners that could help, Ms. Monaco said. A new Justice Department cyber operations liaison will be embedded in Europe and work with U.S. prosecutors and European officials to speed up cases against top cybercriminals, she added. “International cooperation will not be an afterthought,” Ms. Monaco said.
Tonya Ugoretz, deputy assistant director of the FBI’s cyber division, said that international cooperation has already borne fruit.
“We’ve had some notable successes, not only in infrastructure takedowns but also arresting and extraditing some of the criminals behind this activity, as well as some notable virtual currency seizures,” she said while speaking at the same conference as Ms. Monaco.
On Feb. 8 the Justice Department said it seized around $3.6 billion worth of cryptocurrency stolen during a 2016 hack of an exchange. The value of the cryptocurrency at the time made it the largest financial seizure in the Justice Department’s history. Ms. Monaco said this and other efforts involving cryptocurrency seizures should encourage companies to report incidents as early as possible.
“If you report to us, we can follow the money and not only help you but hopefully prevent the next victim,” she said.
Federal prosecutors and investigators will also start looking for ways to disrupt cybercrimes before they happen, instead of waiting to charge perpetrators afterward, Ms. Monaco said. Authorities could, for example, seize servers used to carry out attacks or issue decryptors to help victims whose data is encrypted during an attack, she said.
Ms. Monaco said the efforts to disrupt cyberattacks before they occur will require a cultural shift similar to the Justice Department’s counterterrorism work after the Sept. 11, 2001, terrorist attacks in the U.S. The Justice Department will consider “all available tools” to disrupt hacking crimes and reduce risks to victims, she said, including sanctions, export controls and efforts with international partners and the private sector.
“We should be looking for success both inside and outside the courtroom. My message to cybercriminals is equally clear: The long arm of the law can and now will stretch much farther into cyberspace than you think,” she said.
Write to James Rundle at email@example.com and Catherine Stupp at Catherine.Stupp@wsj.com
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